By Donald Albach
As you approach retirement, a host of new decisions must be made, and some of the most confusing can be around Medicare. Determining when and how to enroll in Medicare can be a challenging task, even for the most knowledgeable retirees. With Part A, Part B, Part D, Medigap plans, Medicare Advantage plans, and more to consider, it can feel overwhelming.
To simplify your journey in understanding this federal health insurance program designed for retirement-age individuals, here are a few facts about Medicare and when to enroll that can give you clarity on the right plan for you.
The Four Parts of Medicare
Medicare coverage is divided into 4 parts, each with a different coverage level:
- Medicare Part A: Also known as hospital insurance, Medicare Part A covers inpatient hospital care and some nursing care coverage. If you or your spouse paid Medicare payroll taxes during your working years for at least 10 years, Part A is free for you. If you didn’t, you can still get coverage by paying a monthly premium.
- Medicare Part B: Part B is medical insurance coverage for some medical conditions and preventative care, including doctor visits and other outpatient services. You will pay a monthly premium for Part B coverage. Together, Parts A and B are known as Original Medicare.
- Medicare Part C: Known as Medicare Advantage Plan, this is an alternative to Original Medicare that is offered through Medicare-approved private companies. This plan bundles Part A and Part B and often includes Part D as well. Medicare Advantage plans also often cover additional services not covered by Part A, Part B, or Part D, including vision, hearing, and dental visits.
- Medicare Part D: This optional private insurance add-on includes drug coverage. Not to make things even more confusing, but Part D has a late enrollment penalty. Even if you don’t need prescription coverage when you are first eligible for Medicare, enroll in the plan to avoid extra long-term costs.
The Centers for Medicare & Medicaid Services (CMS) recently stated that the average monthly premium for Medicare Part D coverage in 2024 is anticipated to hover around $55.50. This projection reflects a decline of 1.8% from the 2023 figure of $56.49. These improvements help Medicare beneficiaries enjoy reduced costs, allowing for more affordable access to prescription medications.
Your Open Enrollment Options
Keep in mind that open enrollment is not for those who have not yet enrolled in Medicare. If that’s you, your initial enrollment period is based upon your birthday, not a set date on a calendar. You need to sign up for coverage during the window of time that begins three months before the month of your 65th birthday and ends at the end of the third month after, for a total of seven months.
The open enrollment period affects each part separately. Here’s what you can do with your Medicare coverage:
- If you have Medicare Parts A & B, you can switch to Part C.
- If you have Medicare Part C, you can switch back to Original Medicare or change to a different Medicare Advantage Plan.
- If you have Part D, you can switch to a different Part D plan or drop your prescription drug plan.
You can also use this time to enroll in Part C and Part D for the first time.
When Can I Make These Changes?
Medicare open enrollment is from October 15th through December 7th each year. Making changes to your plan during this time provides the most flexibility and will affect your 2024 Medicare coverage.
Don’t get this confused with the Medicare Advantage open enrollment period that occurs from January 1st to March 31st, where those with Part C can change to a different Part C plan or switch to Parts A and B. Any other changes need to happen in the October-to-December enrollment period.
A Strategy to Fit Your Needs
When it comes to Medicare enrollment, there are many factors to take into account—because how you make this decision can shape your wealth management strategy for retirement. While the details may seem complex, you don’t have to navigate this process on your own.
At Millstone Financial Group, we’re here to guide you every step of the way and help identify the plan that best fits your needs. To explore how we can support you or if you have any questions about your retirement plan, we invite you to schedule a complimentary consultation by calling (732) 385-8544 or emailing dalbach@millstonefinancial.net.
About Don
Donald Albach is President and Co-Founder of Millstone Financial Group, an independent financial advisory firm helping pre-retirees and retirees pursue their retirement goals. Don has over 26 years of experience in the financial industry and focuses on retirement planning, designing retirement income planning strategies to guide his clients toward financial independence. Don graduated from Norwich University, the nation’s oldest private military college, and has worked his entire career in the financial services industry, including First Boston, MetLife, and C&A Financial Group. He co-founded Millstone Financial Group in 2012 with Michael Russo. Don and Mike met each other while working at MetLife, and in 2003 both he and Mike were recruited to work at C&A Financial Group, where they spent the next 10 years. It was at C&A Financial Group where they decided they needed to start their own company that strictly focused on retirement income planning. They both had a desire to help people navigate the complexities of retirement and created Millstone Financial to do just that.
Don currently lives in Monroe Township, NJ, with his wife, Tina, to whom he has been married since 1992. They have three children together: Paige, Donny, and Ally. Don’s two passions are sailing and watching college football, and he also enjoys cooking Sunday dinner for his family. To learn more about Don, connect with him on LinkedIn.
Advisory services are offered through Millstone Financial Group Limited Liability Company, a Registered Investment Advisor in the State of New Jersey. Insurance products and services are offered through Millstone Financial Group Limited Liability Company. Millstone Financial Group Limited Liability Company is not affiliated with or endorsed by the Social Security Administration or any government agency.
All material discussed is for informational purposes only. Opinions expressed are solely those of Millstone Financial Group Limited Liability Company and staff. All topics covered are believed to be from reliable sources; however, Millstone Financial Group Limited Liability Company makes no representations as to its accuracy or completeness. Investing involves risk including the loss of principle.
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